Motorists in South Africa are set to face higher fuel prices in March, as fresh data points to increases in both petrol and diesel costs despite earlier expectations of a slight over-recovery.
According to the Central Energy Fund (CEF), the latest projections show modest increases for petrol and far steeper hikes for diesel, driven primarily by a surge in international oil prices and a slowdown in the rand’s recent gains against the US dollar.
Based on current calculations, the following changes are anticipated to take effect on the first Wednesday of March:
-Petrol 93: Increase of 3 cents per litre
-Petrol 95: Increase of 5 cents per litre
-Diesel 0.05%: Increase of 46 cents per litre
-Diesel 0.005%: Increase of 49 cents per liter.
While the petrol adjustments are relatively minor, the sharp rise in diesel prices is expected to have broader economic implications, as diesel plays a key role in freight, agriculture, and public transport.
The main driver behind the increases is the rapid escalation in global oil prices. Brent Crude oil has climbed above $70 per barrel, marking its highest level in six months.
Oil prices have risen by more than 12% this month amid heightened geopolitical tensions in the Middle East.The spike follows preparations by the United States for potential military intervention involving Iran.
Analysts warn that any disruption to Iran’s oil production, currently exceeding three million barrels per day — could significantly affect global supply.Further concerns centre on the Strait of Hormuz, a strategic passage through which roughly 20% of the world’s oil supply flows daily.
Iran has repeatedly threatened to close the route to container traffic and has conducted military exercises in the region.
At the same time, the US dollar has strengthened, placing additional pressure on the rand.
Although the local currency was previously expected to strengthen below R16 to the dollar, it is currently trading around R16.02.
A firmer dollar typically makes oil priced internationally in dollars more expensive for importers like South Africa.
Economists have also suggested that the rand may be trading near its fair value, limiting the likelihood of sustained gains that could offset rising oil costs.
As a result, motorists could see further upward pressure on fuel prices before the official adjustments take effect in early March.
Sub-Editor: Matlala Kgaugelo
